Financial Conduct Authority (FCA), announced their decision to fine hedge fund millionaire Crispin Odey PS1.84m and ban him from the UK Financial Services Industry for his lack of integrity.
The FCA believes that he intentionally sought to frustrate Odey Asset Management’s (OAM) disciplinary processes into his conduct in order to protect his interests.
The City regulator stated that Odey who founded OAM showed “reckless disrespect” for OAM’s governance, which caused the hedge fund’s regulatory requirements to be breached.
Therese chambers, FCA’s joint executive director for enforcement and market supervision said: “A culture in which complaints of misconduct are not handled effectively can put markets and consumers at risk. Mr Odey tried to avoid and obstruct attempts to hold him accountable. “His lack of integrity is enough to ban him from the industry.”
Odey referred the FCA decision notice to Upper Tribunal. This is a court which deals with appeals of regulatory decisions. He and the FCA are both going to present their case. The FCA stated that its findings were provisional, and reflect their belief about what happened and how they believe his behavior should be characterized.
Odey is accused of sexually assaulting or harassing 13 women. He became famous for his ties to the Conservative Party and the Brexit campaign.
Odey strongly denies the allegations. The Financial Times first reported the story in June 2023.
The FCA found that Odey’s conduct towards OAM and FCA was “lacking candour”. It also determined that his conduct showed that he “was not a fit person” for any role related to regulated activity.
Remove members from OAM’s Executive Committee
Odey was given a final warning by the executive committee of the hedge fund (ExCo) for inappropriate behavior in February 2021. This followed an internal investigation conducted by OAM.
OAM held a hearing in November 2021 to determine if Odey had violated the written final warning. Odey, however, used his majority stake in the hedge-fund to remove OAM’s ExCo members on 24 December 2021 and appointed himself as the only member.
He then decided, on 6 January 2022, that the hearing into his conduct was to be postponed indefinitely because he claimed he could not conduct it impartially.
Odey appointed the new ExCo and resigned on 12 January 2022.
On 3 March 2022, OAM’s ExCo was made aware of a second allegation of nonfinancial misconduct. The alleged violation was a breach of a final written warning that Odey shouldn’t touch another staff member (unless in a professional setting) or talk about staff members or others inappropriately.
Odey signed his final written warning a few weeks before the allegation was made. He was accused of holding the hand of an upcoming OAM employee on a tour and having an inappropriate lunch conversation.
OAM confirmed on 21 March 2022 to the FCA, that this additional allegation will be included in the ongoing internal investigation relating other alleged violations of the Final Written Warning.
Odey said, in a meeting on 23 March 2022 with the ExCo, that if the ExCo made a negative finding against him, “he would close the firm, sue personally members of the ExCo, and remove the insurance cover, so that ExCo Members could not use it to finance their defense”.
The HR law is irrelevant here
In response to this new allegation, OAM’s Compliance officer and the new members of the ExCo discussed measures that would protect the staff while the investigation was ongoing.
Odey was also asked to work remotely or be separated from the staff at OAM’s office. Odey expressed his disapproval when he heard about these proposed measures and said that he believed the ExCo was unduly influenced the FCA.
He refused to work from a distance or be separated. The FCA determined that Odey had shown disregard for OAM policies and procedures and the ExCo’s responsibility to maintain standards of conduct by senior staff towards female employees at the meeting held on 28 March 2022.
Odey said that “HR law didn’t matter here” and he would accept only a FCA finding. He called an ExCo member who explained to him the importance of safeguarding measures “fucking spineless”. The FCA concluded that the safeguarding steps were not implemented after these exchanges.
Odey removed OAM’s ExCo members again on 31 March 2022, after disagreements about the way to proceed with a disciplinary hearing. He then appointed himself the sole member of ExCo. Odey remained on the ExCo until July 2022, when he appointed new members.
OAM’s hearing for disciplinary action was finally held on 29th November 2022. This was nearly a full year after the original date.
Odey received a letter of outcome from OAM on 13 December 2022. The letter stated that while Odey technically violated the final written notice in two instances, these breaches did not amount to substantive violations or inappropriate conduct that could be reasonably considered harassment.
Odey was required to undergo further mandatory training by the ExCo and he was also subjected to an embargo of one year in management. The original final written warning was continued, but with no prescriptive behaviour examples and a 12-month time limit that could be reviewed.
The FCA’s decision notification sent to Odey this month found that, even though Odey allowed ExCo proceed with the second hearing, Odey’s actions since December 2021 have significantly undermined the credibility and effectiveness OAM governance structures because Odey has shown that he is “prepared to override at will” if he does not agree with the decisions.
OAM is in the process to wind down and has no longer been authorised by FCA.
Subscribe to our weekly HR news and guidance
Every Wednesday, receive the Personnel Today Direct newsletter.
Personnel Today offers HR opportunities for financial services
View more job opportunities in Banking, Finance, Insurance and Accountancy
